Rethinking the International
Monetary System: An Overview

When the Federal Reserve Bank of Boston chose "Rethinking
the International Monetary System" as the topic
for its 43rd Economic Conference, it was clear that
the worst international financial crisis in decades
had caused tremors within the economics profession and
the policymaking establishment. The miracle countries
of Asia had suffered sharp currency devaluation and
deep economic downturns, the turmoil had spilled over
into Russia and Latin America, and a severe liquidity
crisis had briefly threatened banking systems in the
advanced countries. Not surprisingly, then, the events
of the 1990s provoked many proposals for reform. But
these proposals reflected differing, even contradictory
views about the underlying problems and their solutions,
and they did not always reveal a systemic approach to
reform.

In hopes of clarifying some of these issues, the Bank
asked conference participants to examine key parts of
current international arrangements: the eclectic exchange
rate system, international capital markets, the international
lender of last resort, and policy coordination. We also
asked them to consider how these critical components
interact. We hoped that adopting a systemic approach
would help to narrow the differences among economic
policymakers and identify priorities for reform. Our
ultimate goal was to define ways to enhance the benefits
of global integration, while limiting its costs. This
article summarizes the participants' answers to our
questions.